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The Honolulu Advertiser
Posted on: Monday, March 10, 2008

Even in California, green fuel doesn't come easy

By Elizabeth Douglass
Los Angeles Times

LOS ANGELES — Ben LeBeau pulled up to the Conserv Fuel station on the city's west side on a recent Friday and started filling the tank of his black Chevy Tahoe with a liquid rarely found in California — E85, an "alternative fuel" made of 85 percent ethanol and 15 percent gasoline.

The station is near his office, and he's been a regular there for more than a month. LeBeau's Chevy, a so-called flexible-fuel vehicle, can run on gasoline, E85 or any combination of the two — and that's one reason he bought it.

"Unless I have to, I don't use regular gas anymore," said LeBeau, 34, of suburban Agoura Hills. He doesn't mind that his mileage per gallon is lower with E85, which is usually made from corn. The fuel is easier on the environment than gasoline, LeBeau said. "It's what you can do today."

For LeBeau and other E85 converts, there's just one problem: Although California leads the nation in adopting alternative fuels, there are only seven places to get E85 in the state, and only three are open to the public. New government funding and a greater sense of environmental urgency is starting to improve the outlook, though.

In 2007, California had 835 alternative fuel stations. Most dispense electricity (379), liquefied petroleum gas (215) or compressed natural gas (174), according to figures compiled by the U.S. Department of Energy. Sites offering liquefied natural gas, hydrogen, biodiesel or E85 were far down the list.

WHY SO LITTLE?

The disparity is largely a reflection of the state's longtime emphasis on converting large fleets used by governments, school districts and private industry to alternative fuels, rather than changing the vehicle choices and habits of the masses. It's also a manifestation of California's small role in growing corn and soy beans, the primary crops used to produce E85 and biodiesel.

Now, however, California has adopted ambitious goals for alternative fuels and cutting greenhouse gas emissions — and it no longer can afford to leave the public out of the mix. For starters, the state is going to increase the use of ethanol as a fuel additive to all gasoline sold here. For years, California's gasoline has contained 5.7 percent ethanol to boost octane and comply with federal emissions rules; starting in 2010, that will rise to 10 percent ethanol. For a state that consumes about 43 million gallons of gas each day, that change alone represents a huge jump in ethanol consumption.

Meanwhile, biodiesel backers have helped build a statewide roster of more than 50 sites, with many selling to the public and offering blends ranging from B10 (10 percent biodiesel and 90 percent petroleum diesel) to B99, a nearly pure biodiesel fuel.

New state and federal grants will help add E85 sites. In May, the state air board set aside millions to help set up 34 public E85 stations. Most are planned for the Sacramento area, but sites also will open in Carlsbad and Oceanside in San Diego County. Separate grants will fund E85 sites elsewhere later this year.

CHEVRON'S SAY

Chevron Corp., one of California's largest fuel retailers, participated in a one-year state demonstration project that included setting up two E85 stations for government use and studying the results. But Chevron won't sell the fuel at stations it owns, and company spokesman Leif Sollid said, "our marketers and retailers have not expressed a widespread desire to install E85 at their stations."

Sollid disagrees with critics who believe U.S. oil companies are dragging their feet on E85 and biodiesel to protect profits from their franchise fuels. Even so, a look at the oil giant's U.S. retail network is telling: Out of 9,600 U.S. stations selling Chevron or Texaco fuel, 26 offer biofuels.

In an industry that has sold the same basic products for more than a century, change doesn't come easily. Sometimes it takes prodding from a younger generation.

Family-owned Redwood Oil Co., based in Rohnert Park, operates 19 Chevron-branded gas stations. In May, the company started selling 99 percent biodiesel at one station and added B20 at another outlet a few months ago.

"I was the one who started the project," said Julie Van Alyea, 33, whose father, Peter Van Alyea, is the company's founder and owner. "He probably wouldn't have done it without me. ... I'm an environmentalist, and I wanted to make it available."

CONSERV'S STORY

The story behind Conserv Fuels is much the same. But the hurdles have been high.

In 2006, when Kristopher Moller persuaded his dad to offer biodiesel at some of the family's USA gas stations in Southern California, he thought the timing couldn't have been better. After all, high gas prices were infuriating drivers, the government was pushing alternative energy sources and more and more people were becoming convinced that petroleum-based fuels were making global warming worse.

But in early 2007, just weeks after Moller finished outfitting the fifth USA station with biodiesel pumps, his father, John, agreed to sell the USA chain to Tesoro Corp. A few months ago, Tesoro stopped offering 99 percent biodiesel.

It was back to the drawing board. Kristopher Moller took control of a USA station in Los Angeles that was not included in the Tesoro deal and in April started selling nearly pure biodiesel made from cooking and vegetable oils. The station was renamed Conserv Fuel and hosted a visit from Democratic presidential candidate Sen. Barack Obama.

In December, the station became just the second outlet in the state offering E85 to the public. The move should have been a triumph for Moller, but he was in no mood to celebrate.

Permitting delays and other glitches had sapped his finances. "I was struggling and fighting," said Moller, a 32-year-old Malibu resident, "but I didn't have the pocketbook to weather the storm."

So he handed control back to his dad, who plans to give the station one year to improve its financial performance. If it doesn't, the elder Moller intends to convert it back into a standard gasoline station with a big oil company brand on the pumps.

"His heart is into the biofuels ... and he really wants to see it succeed," John Moller said of his son. But his own view, Moller explained, is "show me the money."

'EXPENSIVE BUT WORTH IT'

The younger Moller is pinning his hopes on customers such as James Courtney, who on a recent Friday drove to Moller's station to pump the 99 percent blend of biodiesel into his buttercup-colored 1976 Mercedes Benz 300D, a car that's been in his family for decades. He paid $3.799 a gallon, more than he would have for standard diesel, but Courtney didn't mind.

"It's expensive, but it's worth it," he said. "I believe in supporting the people who have the courage and the foresight to do this."

Despite the obstacles, groups backing E85 are planning sites in Los Angeles, Ventura and other areas. Even the elder Moller is warming to the trend. He plans to add biodiesel to stations he owns in Santa Barbara and in San Luis Obispo, and he's backing the construction of an ethanol plant in Pixley, Calif.

"It's hard for me, but I'm realizing more and more that it's the way of the future, and we have to get into it," John Moller said. "It's just like it's hard for an old man to start using a BlackBerry."